“You cannot invest in Kerala if you’re not going to pay the workers their reasonable dues or follow the environmental laws,” says Minister P Rajeev on Kitex’s exit from Kerala.

Kerala Minister for Industries and Law P RajeevFacebook
news Interview Thursday, July 22, 2021 - 14:39

Two months into taking oath as Minister for Industries and Law, P Rajeev has his task cut out — to change Kerala’s image of being “unfriendly” for business and investments. With apparel giant Kitex pulling out of Kerala, the state’s ‘anti-business’ reputation has once again made headlines. Kitex, said to be the world’s second-largest children’s apparel manufacturer, made a public exit from the state in late June, pulling Rs 3,500 crore it had planned to invest in Kerala. Kitex is now going to set up a facility in Telangana with an initial investment of Rs 1,000 crore, even as other states are trying to woo the company.

Kitex Chairman Sabu Jacob alleged harassment from government officials and multiple raids on the company for exiting Kerala. The raids were conducted allegedly following a series of complaints about non-payment of minimum wages, not providing hygienic living conditions for its workers and not following COVID-19 protocols and pollution norms.

“You cannot invest in Kerala if you’re not going to pay the workers their reasonable dues or follow the environmental laws in place,” says Minister Rajeev. He has been pushing for ‘responsible investment,’ in line with Environmental, Social, and governance (ESG) standards.

In an interview, P Rajeev spoke to TNM about the Kitex controversy, measures taken to tackle unemployment in the state and more.

Edited excerpts from the interview:

When Kitex announced the withdrawal of its investment from Kerala, did the state government try to engage in talks with the company?

The government, at all times, was open for discussion and talks. As a minister, when I came to know about the raids through social media, I got in touch with them and even told them that I will get back to them after getting more details from the authorities. Before I could get the details and revert, their Managing Director announced to the media that they are withdrawing their investments from the state.

This particular decision by Kitex was politically motivated as well as to further strengthen their business interests. They are well within their right to do so. The people of Kerala, by now, have understood that they wanted to tarnish the image of the state for their vested interests. We cannot give any industrialist any promise that no kind of inspection will ever take place. We also cannot give anyone any exemption when it comes to the laws and all industries functioning here should operate according to the laws.

Watch: Kitex Chairman announces his exit from Kerala

What were the findings from the raids and inspections conducted at the various units of the firm?

We are yet to get the final reports since the findings from the inspection will first be sent to the NHRC [National Human Rights Commission] and the other agencies that initiated these raids in the first place. We even informed them [Kitex] that we are willing to discuss the matter with the firm once we get the report from the agencies.

How is the state government planning to tackle the issue of unemployment of the unskilled workforce if firms like Kitex are pulling out of the state?

At the moment, we are not focussing on the unskilled workforce because 90% of the labourers in apparel parks like Kitex are migrant workers. A huge chunk of the unemployed population in Kerala are skilled youngsters who belong to the highly educated category. At the moment, Kerala’s focus is on responsible investments by responsible industries. In the last 60 months, there has been a 100% increase in the number of Micro, Small and Medium Enterprises (MSMEs) in the state — more than 70,000 new MSMEs have been added.

As far as the utilisation of our skilled workforce is concerned, we are promoting startup ventures in the field of IT, pharmaceuticals, medical devices, electronics and so on. Major companies in these areas have also informed about their interests in investing in the state. Also, the Kalamassery startup hub in Ernakulam is fast becoming one of the biggest startup hubs in India.

In 2020, Kerala was ranked 28 in the ‘Ease of Doing Business’ (EoDB) rankings. The Kitex issue could affect your ranking for this year. How do you view this situation?

We have certain reservations when it comes to the Union government’s EoDB list. Kerala had satisfied 85% of the reform action points as stated by the Union government but the Union Territory of Lakshadweep, which had not implemented a single reform, is ranked 15 on the list. Moreover, the discussion across the globe has shifted from the EoDB to responsible investment. Most of the investments these days are focused on Environmental Social Governance (ESG). And that’s exactly what we are also focusing on. Our goal is to turn Kerala into India’s “responsible investment” destination.

Have you taken any new measures to improve the EoDB in Kerala?

An expert committee has been constituted to analyse all the laws relating to industries and check whether there is a need to update or remove outdated laws. The committee has also been asked to submit a report regarding problems faced by the Industrial sector of the state so that we can make the changes accordingly. We are also constantly interacting with business bodies and stakeholders of the investment community and are open to their suggestions as well. The Kerala government has also decided to implement a statutory grievance address mechanism to address the concerns of industrial firms.

There is also a perception about hindrances to setting up business in the state due to labour unions as well. What is the government doing to address this?

There is a state in India where an iPhone factory was ransacked (referring to the incident at Wistron’s plant in Bengaluru, Karnataka). There is another state in India where a multinational automobile company was set on fire (referring to the fire at Maruti Suzuki’s plant in Manesar, Haryana). Such incidents haven’t taken place in Kerala. It is due to many of these labour strikes that Kerala hasn’t witnessed massive layoffs like in other states. Workers in Kerala are well aware of their rights and many of them also give the desired output for their companies and they deserve to be given their reasonable dues. Most of the anti-union news floating around is nothing but propaganda. The reality is different.

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